what you describe ("if you aren't big and selling enough games, there aren't enough of you to pay the bills") is exactly the thinking I used to see inside Microsoft, not just around xBox, but around various development tools. it is a really really weird mindset today, though I think for xBox in the early days, when you really needed some low-level hardware tools to get the best juice out of the GPU, it still held a bit of whater. but that was then, and now game engines and GPU programming are much much easier. both Apple's XCode and Android development tools are basically free and there is a vast quantity of good quality graphics and physics and GLSL open source to draw on. they need to change their thinking about tools and access. they have to believe that developers will come and make great games and will be willing to give you a cut if you give them distribution, promotion, and access to your huge installed base of consoles.